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Daily news podcastMicrosoft has urged the US government to block Google's planned acquisition of DoubleClick.
Testifying before the Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights, Microsoft claimed that the purchase would create an illegal monopoly in the online advertising market.
The merger would allow Google to control 80 per cent of the online advertising market, spanning text and banner ads, allowing the search giant to dominate the market, argued Microsoft general counsel Brad Smith.
Google would also gain control of the world's largest databases of online user data. This information would allow Google to better target its advertisements, but raises questions about privacy, alleged Smith.
"One question is whether this merger will create a whole new meaning to the term 'being Googled'," he quipped.
Microsoft first raised its objections to the DoubleClick acquisition in April.
In a separate testimony on 27 September, Google's chief legal officer David Drummond denied any antitrust implications in the $3.1bn acquisition.
"Online advertising benefits consumers, promotes free speech and helps small businesses succeed," Drummond testified.
"Google's acquisition of DoubleClick will help advance these goals while protecting consumer privacy and enabling greater innovation, competition and growth."
He added that the markets for text and display advertisements are complementary businesses.
DoubleClick helps deliver ads to third-party websites by allowing them to manage and measure campaigns, but does not sell any advertisements.
Google, by comparison, is in the business of directly selling text advertisements for placement near its search results or on third-party websites.
Google also claims to see further evidence of the market's competitiveness in a series of acquisitions by Yahoo and Microsoft following the announcement of the DoubleClick deal.
In a monopoly market, the search giant argues, Microsoft would not have spent $6bn buying aQuantive, a direct competitor to DoubleClick.
Drummond also attempted to eliminate any privacy concerns. Although he admitted that the bundling of the user data from DoubleClick and Google will allow for better targeting of advertisements, he claimed that Google has no plans to exploit its position in that market.
Citing a recent decision to render its its server logs anonymous after 18 months and reduce cookie life spans from 30 to 24 months, Drummond argued that Google is firmly committed to protecting its users' privacy.
"We are constantly working to innovate in our privacy practices and policies, " he said. "For us privacy does not begin or end with our purchase of DoubleClick. Privacy is a user interest that we have been protecting since our inception."
See also:
Close of aQuantive buy leads to new advertising branch 14 Aug 2007
Proposed merger raises 'antitrust' and 'privacy' concerns 29 May 2007All Ecommerce
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